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Average mortgage rates continue to fall despite swap changes – Rightmove

  • 24/01/2024
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Average mortgage rates continue to fall despite swap changes – Rightmove
While one major lender has moved to increase mortgage rates, the overall trajectory for pricing is still a downward curve, according to a property portal

This week has seen a number of major players including Nationwide, Family and Virgin Money all reduce their mortgage rates across various residential, buy-to-let and remortgage products.

However, one high street lender Santander moved in the other direction and chose to hike up prices in response to rising swap rates.

Experts have noted that the move was hardly surprising given the current volatile market but that it is unlikely to cause a long-term domino effect of lenders pushing up their prices.

Nicholas Mendes, a mortgage expert from Jon Charcol, said: “This latest repricing from Santander had been expected due to the increase in swaps from when these original deals were priced. It’s only a surprise that it’s taken this long. I expect we will see a few lenders among the best to make slight adjustments, though this isn’t a long-term trend as rates are expected to decrease over the year.”

Indeed, in its weekly update, Rightmove noted that rates across all metrics are lower than they were a year ago.

The average five-year fixed mortgage rate is now 4.67 per cent, down from 4.85 per cent a year ago. The average two-year fixed rate is now 4.98 per cent, down from 5.16 per cent a year ago.

The average 85 per cent loan-to-value (LTV) five-year fixed mortgage rate is now 4.60 per cent, down from 4.88 per cent a year ago and the average 60 per cent LTV five-year fixed mortgage rate is now 4.13 per cent, down from 4.57 per cent a year ago

Rightmove also calculated that the cost of a mortgage for a first-time buyer has also fallen in the last year. The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85 per cent LTV mortgage, is now £1,062 per month, down from £1,093 per month a year ago.

Average mortgage rates continue to trend downwards

Matt Smith, Rightmove’s mortgage expert said: “Some conflicting rate trends reported this morning shows that lenders are treading a fine line between offering some of the most competitive rates in many months and being caught offside by swap rate changes. Lender margins remain tight, and indeed after a VAR check it appears one lender jumped the gun slightly with its rate cuts, needing a slight correction.

“This doesn’t change the big picture that overall, average rates continue to trend downwards, with further reductions in this week’s data, and more expected to come, with those looking to take out a mortgage soon likely to see much more attractive deal on offer for them than at the peak six months ago.”

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